Citation Nr: 9831745
Decision Date: 10/27/98 Archive Date: 11/02/98
DOCKET NO. 95-33 998 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Phoenix,
Arizona
THE ISSUE
Whether it was proper to reduce the veteran’s monthly rate of
improved pension from February 1, 1990, to January 1, 1991,
due to evidence of previously unreported earned income of
$168.00 for the year 1990.
ATTORNEY FOR THE BOARD
John Kitlas, Associate Counsel
INTRODUCTION
The veteran served on active duty from August 1941 to January
1946.
This matter is before the Board of Veterans’ Appeals on
appeal from a February 1995 determination by the Department
of Veterans Affairs (VA) Regional Office (RO) in Phoenix,
Arizona, which reduced the veteran’s monthly rate of improved
pension from February 1, 1990, to January 1, 1991, due to
evidence of previously unreported earned income of $168.00
for the year 1990.
As a result of the above reduction in the veteran’s monthly
rate of Improved Pension, an overpayment was created in the
amount of $154.00. In a November 1995 decision, the RO’s
Committee on Waivers and Compromises (Committee) denied the
veteran’s request for a waiver of overpayment. A review of
the claims folder shows that the veteran did not submit a
notice of disagreement regarding the waiver within the
statutory one-year period. Consequently, this issue is not
before the Board. 38 C.F.R. §§ 20.200, 20.302 (1997).
During the pendency of this appeal, the veteran moved to
Nevada, as noted in a June 1996 Report of Contact. However,
the issue on appeal has remained with the RO in Phoenix,
Arizona.
CONTENTIONS OF APPELLANT ON APPEAL
The veteran maintains that he has never worked for the
company which reportedly paid him $168.00 in 1990.
Furthermore, he has theorized that this information may be
due to the company using his name and social security number
to submit a false report of taxes withheld in order to reduce
their own tax liability. Therefore, the veteran believes
that it was not proper for his pension benefits to be reduced
based upon this amount of reported earned income.
DECISION OF THE BOARD
The Board, in accordance with the provisions of 38 U.S.C.A.
§ 7104 (West 1991 & Supp. 1998), has reviewed and considered
all of the evidence and material of record in the veteran's
claims file. Based on its review of the relevant evidence in
this matter, and for the following reasons and bases, it is
the decision of the Board that the reduction of the veteran’s
monthly rate of improved pension from February 1, 1990, to
January 1, 1991, was proper.
FINDINGS OF FACT
1. On an Income Verification Report received in February
1991, the veteran reported that he had received no wages from
employment from January 1, 1990, to December 31, 1990.
2. An Income Verification Match Information Sheet, dated in
May 1993, lists eight companies, including PEC, with whom the
veteran was supposedly employed in 1990. The amount of total
earned income from PEC for 1990 was listed as $168.00.
3. In May 1993, the RO sent verification letters to eight
companies regarding whether the veteran had worked for the
respective company in 1990. The amount of earned income the
veteran allegedly received from these companies was not
listed on the letters.
4. In August 1993, PEC responded that the veteran had worked
for them in 1990, and earned a total of $168.15.
5. The RO informed the veteran of the information it had
concerning unreported earned income in May 1993, including
the names of the various companies. In June 1993, the
veteran responded that he had never worked for any of the
eight companies, including PEC.
6. In February 1995, the RO informed the veteran of its
proposal to reduce his monthly rate of pension from February
1, 1990, to January 1, 1991, due to the unreported earned
income of $168.00 for 1990. The RO gave the veteran sixty
(60) days in which to submit new evidence showing that the
proposed action should not be taken.
7. In spite of the veteran’s contentions, there is no
evidence of record to show that PEC had reason to
deliberately misreport payroll information regarding the
veteran, nor that the information reported was incorrect.
CONCLUSION OF LAW
It was proper to reduce the veteran’s monthly rate of
Improved Pension from February 1, 1990, to January 1, 1991,
due to evidence of previously unreported earned income of
$168.00 for the year 1990. 38 U.S.C.A. §§ 101, 1501 et seq.
(West 1991 & Supp. 1998); 38 C.F.R. §§ 3.252, 3.260, 3.271,
3.660 (1998).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
Background. The veteran’s original pension application was
received in December 1985. The only income that he reported
was social security, in the amount of $373.50 per month.
In correspondence dated in January 1986, he was informed that
he had been awarded disability pension in the amount of
$258.00 per month, effective December 1, 1985. The
correspondence stated that the amount of pension was based
upon the veteran’s countable annual income of $4,614.00 per
year from social security. Additionally, the formula used to
calculate the amount of pension was reviewed. The veteran
was also informed that benefits had been included for his
spouse, and that any change in the number or status of his
dependents needed to be reported promptly to the VA.
The record shows that the appellant subsequently submitted VA
Forms 21-0516, Improved Pension Eligibility Verification
Reports, in February 1988, February 1989, February 1990,
February 1991, and March 1993. On all of these reports the
veteran stated that he had received no wages from employment.
In correspondence dated in February 1990 and April 1991, the
RO informed the veteran that his rate of pension was directly
related to his family income, and that adjustments would be
made based on any change in family income. Therefore, he
needed to immediately notify the VA of any changes to his
income, and that failure to do so may result in the creation
of an overpayment. Additionally, a letter dated in October
1992 shows that the veteran’s pension was reduced due to
previously unreported income of his wife for 1989.
An Income Verification Match Information Sheet, dated in May
1993, lists eight companies, including PEC, with whom the
veteran was supposedly employed in 1990 and from which he had
received unreported earned income. The amount of earned
income from PEC for 1990 was listed as $168.00.
The evidence indicates that verification letters were sent to
all eight of these companies requesting confirmation as to
whether the veteran had worked for them in 1990, and, if so,
the amount of earned income he had received. The veteran was
identified by his first initial of his first name, his full
last name, and his social security number. It should be
noted that the amount of earned income the veteran supposedly
received from each respective company was not listed on the
verification letters. At least three of the companies
responded that they had no record that the veteran had been
employed by them. PEC responded in August 1993 that the
veteran had worked for them full-time in 1990, and that he
had earned a total of $168.15 during this period.
The record also shows that an inquiry was sent to the veteran
in May 1993, regarding the alleged amount of unreported
earned income for 1990. He was requested to correct any
errors that he found. Additionally, he was informed that he
would be notified of any proposed action to reduce or
terminate his benefits, and that he would be given ample time
to contest the action.
The veteran responded in June 1993 that he had never worked
for any of the companies listed on the Sheet. However, he
remembered that he had submitted employment applications to
at least two of the companies on the list, which he
identified as telemarketing firms. He also thought it was
possible that he could have applied for employment with the
other companies as well, but asserted that he did not
recognize any of the names. PEC was one of the companies
that the veteran did not recognize. Furthermore, the veteran
theorized as to what he thought “may” have happened. He
stated that some small, unscrupulous companies submit false
reports of taxes withheld in order to reduce their own tax
liability. All they needed was a name and social security
number to perpetrate this fraud, and that such information
would have been obtainable from an employment application.
In February 1995, the RO sent the veteran a letter in which
he was notified of the proposal to reduce his pension
benefits effective February 1, 1990, due to unreported earned
income of $168.00. The RO stated that PEC had verified these
wages. Moreover, the veteran was informed that he had sixty
(60) days in which to submit new evidence showing that the RO
should not take the proposed action.
The veteran submitted a statement contesting the proposed
reduction in April 1995. He asserted that he told the VA on
“at least three previous occasions” that he had never
worked for PEC. Further, the veteran expressed his anger
over the adjudication officer’s handling of the matter, and
stated that he wished to appeal what he described as a
“unilateral decision” to reduce his benefits.
After receipt of the above statement, the RO informed the
veteran in April 1995 that his pension award had been reduced
as proposed in February 1995.
In response to the reduction, the veteran resubmitted his
April 1995 statement in May 1995. The RO classified this
resubmission as a notice of disagreement, and promulgated a
statement of the case in July 1995. In the statement of the
case, the RO noted that the veteran had been supplied with
PEC’s address so that he could clear up any errors in
reported wages. However, the veteran had failed to submit
any evidence from PEC which would nullify the information
previously submitted by them. Regarding the veteran’s
contention that PEC may have used his name for the purposes
of tax fraud, the RO noted that no information had been
received from the Internal Revenue Service, but from PEC
directly. The RO found that PEC did not have anything to
gain from misreporting payroll expenses to the VA. After
reviewing the formula used to calculate the amount of the
veteran’s pension benefits, the RO concluded that the
reduction in the veteran’s monthly rate was proper.
The veteran’s substantive appeal was received in September
1995.
Legal Criteria. Essentially, pension is a monthly or other
periodic payment made by VA to a veteran because of service,
age, or nonservice-connected disability, or to a surviving
spouse or child of a veteran because of the nonservice-
connected death of the veteran. The amount of pension
actually received is the difference between the recipient’s
countable income and the maximum annual rate permitted by VA
given the recipient’s circumstances. Pension is not payable
if the recipient’s countable annual income exceeds the
maximum limitation given the recipient’s circumstances as set
forth in the legislation. See generally 38 U.S.C.A. §§ 101,
1501 et seq.. In essence, payments of any kind and from any
source will be countable as income unless specifically
excluded. For the purposes of determining entitlement to
improved pension, income will be counted for the calendar
year in which it was received. 38 U.S.C.A. § 1503; 38 C.F.R.
§§ 3.252(b); 3.260.
A veteran or other recipient of VA monthly pension benefits
is required to notify VA of any material change or expected
change in his or her income which would affect his or her
continued entitlement to receive that benefit or the rate of
the benefit being paid. 38 C.F.R. § 3.660(a)(1). Where the
reduction or discontinuance of a running pension award is
required because of an increase in income, the reduction or
discontinuance shall be made effective the end of the month
in which the increase occurred. 38 C.F.R. § 3.660(a)(2).
Analysis. In the instant case, the only issue for the
Board’s consideration is whether the evidence of record was
sufficient to justify a reduction in the veteran’s monthly
rate of improved pension for the period from February 1,
1990, to January 1, 1991.
All sources and amounts of income, with some exception, are
taken into account when calculating the rate of VA pension no
matter how small the amount. See 38 C.F.R. § 3.271 (1998).
Further, the veteran was fully informed that he needed to
report any change in his income, and that failure to do so
may result in the creation of an overpayment. Here, the RO
had evidence that the veteran had unreported earned income
for 1990 in the amount of $168.00. This evidence was in the
form of a confirmation letter from PEC. The Board notes that
PEC was not informed of the amount that the veteran
reportedly earned from the company when the RO requested the
information, and that the information provided by PEC
concurred with the amount listed on the May 1993 Income
Verification Match Information Sheet. The Board is of the
opinion that this concurrence shows the information was
accurate.
The veteran was fully informed of this evidence, and he was
given an opportunity to contest both the evidence and the
proposed rate reduction. Despite the veteran’s theory that
he was the victim of PEC’s efforts to lessen their tax
liability, no evidence has been submitted to show that this
was actually the case. Furthermore, despite this theory and
the veteran’s assurances that he never worked for PEC, there
is no evidence of record to show that PEC had reason to
deliberately misreport payroll information regarding the
veteran, nor that the information reported was incorrect.
Therefore, the Board finds that the RO had a plausible basis
upon which to reduce the veteran’s monthly rate of improved
pension for the relevant period.
For these reasons, the Board concludes that it was proper for
the veteran’s monthly rate of improved pension to have been
reduced for the period from February 1, 1990, to January 1,
1991. As the veteran was provided with the opportunity to
contest the proposed rate reduction, the Board finds that his
procedural rights were not violated.
ORDER
Inasmuch as the veteran’s monthly rate of improved pension
was properly reduced for the period from February 1, 1990, to
January 1, 1991, the benefit sought on appeal is denied.
Gary L. Gick
Member, Board of Veterans' Appeals
NOTICE OF APPELLATE RIGHTS: Under 38 U.S.C.A. § 7266 (West
1991 & Supp. 1998), a decision of the Board of Veterans'
Appeals granting less than the complete benefit, or benefits,
sought on appeal is appealable to the United States Court of
Veterans Appeals within 120 days from the date of mailing of
notice of the decision, provided that a Notice of
Disagreement concerning an issue which was before the Board
was filed with the agency of original jurisdiction on or
after November 18, 1988. Veterans' Judicial Review Act,
Pub. L. No. 100-687, § 402, 102 Stat. 4105, 4122 (1988). The
date which appears on the face of this decision constitutes
the date of mailing and the copy of this decision which you
have received is your notice of the action taken on your
appeal by the Board of Veterans' Appeals.
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